Finance Act 2013

Alternative property finance U.K.

157 [F1 Land in England F2 ... or Northern Ireland sold to financial institution and leased to person] U.K.

(1) This section applies where—

(a) section 71A of FA 2003 (land sold to financial institution and leased to person) F3 ... applies in relation to arrangements entered into between a financial institution and another person (“the lessee”), and

(b) the land in which the institution purchases a major interest under the first transaction [F4 is in England F5 ... or Northern Ireland and] consists of or includes one or more dwellings (or parts of a dwelling).

(2) [F6 This Part] has effect in relation to times when the arrangements are in operation as if—

(a) the interest held by the financial institution as mentioned in subsection (3)(b) were held by the lessee (and not by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(3) The reference in subsection (2) to times when the arrangements are in operation is to times when—

(a) the lessee holds the leasehold interest granted to it under the second transaction, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(4) A company [F7 or individual] treated under subsection (2)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company [F7 or individual] holds the leasehold interest as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).

(5) In relation to times when the arrangements operate for the benefit of a collective investment scheme, this Part has effect as if—

(a) the interest held by the financial institution as mentioned in subsection (6)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(6) The reference in subsection (5) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—

(a) the lessee holds the leasehold interest for the purposes of a collective investment scheme, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(7) In this section—

• “financial institution” has the meaning given by section 73BA of FA 2003;

• “the first transaction” has the same meaning as in section 71A F8 ... of FA 2003;

• “further transaction” has the same meaning as in section 71A of FA 2003;

• “the leasehold interest” means the interest granted to the lessee under the second transaction;

• “the second transaction” has the same meaning as in section 71A F9 ... of FA 2003.

(8) The reference in subsection (1) to a major interest in land is to be read in accordance with section 117 of FA 2003.

(9) Where the lessee is an individual, references in subsections [F10 (2), (3),] (5) and (6) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee's personal representatives.

F11 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 S. 157 heading substituted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by Finance Act 2016 (c. 24), s. 136(6)

F2 Word in s. 157 heading omitted (30.10.2024) by virtue of Finance Act 2025 (c. 8), s. 55(1)(3)

F3 Words in s. 157(1)(a) omitted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 136(3)(a)

F4 Words in s. 157(1)(b) inserted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by Finance Act 2016 (c. 24), s. 136(3)(b)

F5 Word in s. 157(1)(b) omitted (30.10.2024) by virtue of Finance Act 2025 (c. 8), s. 55(1)(3)

F6 Words in s. 157(2) substituted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(1)(a)(3)

F7 Words in s. 157(4) inserted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(1)(b)(3)

F8 Words in s. 157(7) omitted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 136(4)(a)

F9 Words in s. 157(7) omitted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 136(4)(b)

F10 Words in s. 157(9) inserted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(1)(c)(3)

F11 S. 157(10) omitted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by virtue of Finance Act 2016 (c. 24), s. 136(5)

[F12 157A Land in Scotland sold to financial institution and leased to person U.K.

(1) This section applies where Conditions A and B are met.

(2) Condition A is that arrangements are entered into between a person (“the lessee”) and a financial institution under which the institution—

(a) purchases a major interest in land (“the first transaction”),

(b) grants to the lessee out of that interest a lease (if the interest acquired is the interest of the owner) or a sub-lease (if the interest acquired is the tenant's right over or interest in a property subject to a lease) (“the second transaction”), and

(c) enters into an agreement under which the lessee has a right to require the institution to transfer the major interest purchased by the institution under the first transaction.

(3) Condition B is that the land in which the institution purchases a major interest under the first transaction is in Scotland and consists of or includes one or more dwellings or parts of a dwelling.

(4) [F13 This Part] has effect in relation to times when the arrangements are in operation (see subsection (5)) as if—

(a) the interest held by the financial institution as mentioned in subsection (5)(b) were held by the lessee (and not by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(5) The reference in subsection (4) to times when the arrangements are in operation is to times when—

(a) the lessee holds the interest granted to it under the second transaction, and

(b) the interest purchased under the first transaction is held by a financial institution.

(6) A company [F14 or individual] treated under subsection (4)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company [F14 or individual] holds the interest granted to it under the second transaction as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).

(7) In relation to times when the arrangements operate for the benefit of a collective investment scheme (see subsection (8)), this Part has effect as if—

(a) the interest held by the financial institution as mentioned in subsection (8)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(8) The reference in subsection (7) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—

(a) the lessee holds the interest granted to it under the second transaction for the purposes of a collective investment scheme, and

(b) the interest purchased under the first transaction is held by a financial institution.

(9) In this section “financial institution” has the same meaning as in section 71A of FA 2003 (see section 73BA of that Act).

(10) References in this section to a “major interest” in land are to—

(a) ownership of land, or

(b) the tenant's right over or interest in land subject to a lease.

(11) Where the lessee is an individual, references in subsections [F15 (4), (5),] (7) and (8) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee's personal representatives.]

Textual Amendments

F12 S. 157A inserted (15.9.2016) (with effect in accordance with s. 136(8) of the amending Act) by Finance Act 2016 (c. 24), s. 136(7)

F13 Words in s. 157A(4) substituted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(2)(a)(3)

F14 Words in s. 157A(6) inserted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(2)(b)(3)

F15 Words in s. 157A(11) inserted (30.10.2024) by Finance Act 2025 (c. 8), s. 54(2)(c)(3)

[F16 157B Land in Wales sold to financial institution and leased to person U.K.

(1) This section applies where—

(a) paragraph 2 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 (anaw 1) (land in Wales sold to financial institution and leased to person) applies in relation to arrangements entered into between a financial institution and another person (“the lessee”), and

(b) the land in which the institution purchases a major interest under the first transaction is in Wales and consists of or includes one or more dwellings (or parts of a dwelling).

(2) This Part has effect in relation to times when the arrangements are in operation as if—

(a) the interest held by the financial institution as mentioned in subsection (3)(b) were held by the lessee (and not by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(3) The reference in subsection (2) to times when the arrangements are in operation is to times when—

(a) the lessee holds the leasehold interest granted to it under the second transaction, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(4) A company or individual treated under subsection (2)(a) as holding an interest at a particular time is treated as holding it as a member of a partnership if at the time in question the company or individual holds the leasehold interest as a member of the partnership (and this Part has effect accordingly in relation to the other members of the partnership).

(5) In relation to times when the arrangements operate for the benefit of a collective investment scheme, this Part has effect as if—

(a) the interest held by the financial institution as mentioned in subsection (6)(b) were held by the lessee for the purposes of a collective investment scheme (and were not held by the financial institution), and

(b) the lease or sub-lease granted under the second transaction had not been granted.

(6) The reference in subsection (5) to times when the arrangements operate for the benefit of a collective investment scheme is to times when—

(a) the lessee holds the leasehold interest for the purposes of a collective investment scheme, and

(b) the interest purchased under the first transaction (or that interest except so far as transferred by a further transaction) is held by a financial institution.

(7) In this section—

• “financial institution” has the meaning given by paragraph 8 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017;

• “the first transaction” has the same meaning as in paragraph 2 of Schedule 10 to that Act;

• “further transaction” has the same meaning as in paragraph 2 of Schedule 10 to that Act;

• “the leasehold interest” means the interest granted to the lessee under the second transaction;

• “the second transaction” has the same meaning as in paragraph 2 of Schedule 10 to the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.

(8) The reference in subsection (1) to a major interest in land is to be read in accordance with section 68 of the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017.

(9) Where the lessee is an individual, references in subsections (2), (3), (5) and (6) to the lessee are to be read, in relation to times after the death of the lessee, as references to the lessee’s personal representatives.]

Textual Amendments

F16 S. 157B inserted (30.10.2024) by Finance Act 2025 (c. 8), s. 55(2)(3)